Revenue Deferred = Unearned Revenue
Merchandise Available for Sale = BI + Purchases = EI + COGS
Shipping Point = Receiver pays
Shipping Destination = Shipper pays
Net Sales = Sales Discounts Returns & Allowances
Gross Profit = Net Sales COGS
FIFO = higher net income when prices are rising (normal)
LIFO = lower net income when prices are rising (normal)
Inventory Under/Overstated:
COGS = opposite first year, same second year
Net Income = same first year, opposite second year
Assets & Equity = same first year, back to normal second year
Allowance Doubtful for Accounts (ADA) contra asset account with a normal credit balance
Percent of Sales Method adjusting entry = estimated bad debts
Accounts Receivable Methods adjusting entry = amount needed to make total equal to estimated bad
debts
Balance of Accounts Receivable = Net Realizable Value of Receivables + ADA
Total Bond Interest Expense = Total amount paid minus total amount received
% of Sales Allowance Method focuses on matching and income statement
% of Receivables & Aging of Receivables focuses on net realizable value and balance sheet